XRP Falling: When To Expect Growth?

The pair has been declining this week, continuing its corrective move from November 11, when XRP tested the 1.35 resistance, refreshing its September record. Since then, the sellers managed to seize the initiative, pushing the quotes back to the parity area and finally dispelling the hopes of those who had counted on a quick resumption of growth.

Market participants keep ignoring positive news regarding the Ripple project itself, remaining more sensitive to global market sentiment. Ripple CEO Brad Garlinghouse said this week that the company had made significant progress in its legal feud with the U.S. Securities and Exchange Commission (SEC). Garlinghouse noted that he expects the trial to end next year, and its result will affect the entire crypto industry. He also praised the United Arab Emirates, Japan, Singapore and Switzerland for their clear guidelines and “leadership” in crypto regulation.

Last week, the Ripple executives also published a proposal for a regulatory framework for cryptocurrencies called “A Real Approach to Cryptocurrency Regulation.” The document indicated that in addition to protecting investors’ interests, the government should foster innovation and industry growth within the United States. More optimism spread in the cryptocurrency market after the network launched the long-awaited upgrade Taproot. The blockchain will now use the Schnorr signature algorithm, which enables enhanced privacy and security of the network.

This news backdrop completely offset negative market sentiment, which caused risk aversion. Of course, the cryptocurrency market is no exception. At the moment, we observe mass liquidation of long crypto positions, as investors, fearing that the sell-off will continue, move their funds into safer assets. The traditional dollar and its digital counterparts, stablecoins, hold a special place among those. The reason for the current market panic is the significant deterioration of the epidemiological situation across the globe. A number of countries have already forced nationwide lockdowns and reintroduced restrictive measures, which poses a serious threat to the global economic recovery. In addition, two weeks ago, U.S. President Joe Biden signed a $1 trillion infrastructure bill that includes new tax reporting requirements for cryptocurrencies.

Specifically, the bill introduces tougher rules for businesses providing cryptocurrency-related services and expands reporting requirements for brokers. It also mandates that cash transactions in excess of $10,000 will be subject to IRS reporting requirements.

All in all, the cryptocurrency market will remain under pressure in the coming days. So, there’s a high possibility that XRP dips below $1 and retreats to the next support at $ 0.85. We recommend considering this level as the optimal entry point for your long positions betting on the XRP growth back to $ 1.5 and higher.

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